By Pam Martens and Russ Martens: April 25, 2022 The Federal Reserve (the Fed) is the central bank of the United States. It sets monetary policy, including control of the benchmark short-term interest rate known as the Federal Funds rate, or in Wall Street jargon, the “Fed Funds” rate. This is a key rate because it signals the rate at which overnight loans are made between financial institutions and the direction of interest rates in general. Unfortunately, over time, the Fed has also been granted a supervisory role by Congress over Wall Street’s megabanks alongside its ability to bail them out when its crony brand of supervision fails. There was an epic failure in the Fed’s supervision of the Wall Street megabanks in the leadup to the 2008 financial crash and the September 2019 repo blowup. In both cases, the Fed made trillions of dollars in cumulative loans at below-market interest … Continue reading Fed Chair Powell Telegraphs the Perfect Storm for Wall Street’s Megabanks: Rapid Rate Hikes Hitting $234 Trillion in Derivatives